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The global financial crisis has produced a wide array of critics, but no pairing has been stranger than what you might call the capitalism-in-crisis coalition. Anti-government ideologues on the right and anti-business activists on the left are both arguing that capitalism is under threat, though from very different forces. The right-wingers fear that federal market intervention is just the tip of a socialist spear, while the left-wingers gleefully declare that the crisis is proof of capitalism's inherent failure.
Yet even as these ad hoc partners cry foul, another set of odd allies getting together this weekend in Washington may well prove them wrong. The leaders of the U.K., France, Russia, China, India, Brazil, Saudi Arabia, South Africa, Turkey and 11 other developed and developing economies are meeting in Washington at the invitation of President George W. Bush. And the main thing these so-called G-20 members are likely to achieve is a declaration of continuing support for the international free-market system. (Read "10 Things to Do with Your Money Right Now.")
You wouldn't know that, however, from Bush's tone in the run-up to the summit. In his weekly Saturday radio address, the text of which was released Friday, Bush cast himself in the role of defender of free-market capitalism, as if its very existence were on the table this weekend. "This is a decisive moment for the global economy," Bush said. "In the wake of the financial crisis, voices from the left and right are equating the free-enterprise system with greed, exploitation and failure ... But the crisis was not a failure of the free-market system. And the answer is not to try to reinvent that system."
In fact, the G-20 leaders seem to agree with him already — at least in principle. From the Europeans, one hears the expected vague, warm rumblings of cooperation. British Prime Minister Gordon Brown has called for strengthening structures like the International Monetary Fund and the Financial Stability Forum that support the international free-market system, boosting transparency, integration and accountability. French President Nicolas Sarkozy likewise talks of defending and strengthening the system to ensure that another market free fall doesn't happen again.
Even old communist adversaries like Russia and China are on board. Rather than shunning the club of capitalists, China is seeking more power within it, especially at institutions like the International Monetary Fund, where it would like a greater say in macroeconomic lending policies. And Russia is blunt in its embrace of the system it once resisted. "It's not a struggle between ideologies," says one Kremlin official. "The struggle of ideologies is a thing of the past."
Of course, there are a few in the world who still claim the end of capitalism is nigh, like the leaders of Iran and Venezuela and Georgia Congressman Paul Broun, who sees Marxism in Barack Obama's mainstream policies. But if the G-20 countries, which represent some 85%-90% of the global economy, are all on board for capitalism's preservation, why does Bush feel the need to defend it?
With less than two months to go as President, Bush faces few opportunities to change history's judgment of him, including his policies of lax regulation that helped create the crisis with which the world is now struggling. Painting a picture of himself rallying the world to the defense of free-market capitalism is a natural response to his diminished stature, and the G-20 summit is one of his last moments to gain attention on the global stage.
But Bush's last-minute preaching to the choir about the benefits of free enterprise isn't going to help minimize the damage caused by the global financial crisis. It is the potential for a unified response by the G-20 countries that will — like coordinating accounting standards, increasing transparency and launching coordinated economic stimulus programs. Whether or not they manage that remains up in the air; the conference is more likely to produce a predictable statement of principles rather than any new concrete actions. But if they do manage to blunt the effects of the crisis, it will be capitalism that saves Bush, not the other way around.
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- Massimo Calabresi / Washington